The Australian Tax Office (ATO) has issued a taxpayer alert outlining its concerns with some arrangements involving the sale of new and second-hand luxury cars.
According to the ATO, these arrangements involve illegitimate car dealers or agents selling luxury cars cheaper than genuine dealers by avoiding luxury car tax (LCT) and improperly obtaining refunds.
Genuine dealers will sell cars with LCT included in the price. The ATO is concerned that illegitimate dealers will try to have the ATO refund the LCT, and then on-sell the car without LCT being included or remitted.
“Illegitimate car dealers may seek to profit from the LCT by facilitating multiple sales of a car between a number of participating entities, which means you might be asked to pay someone for the car that you weren’t dealing with, or pick-up the car from another location,” Assistant Commissioner Tony Poulakis said.
“If you are a car dealer, beware that you may be asked to participate in these arrangements by moving cars through your books or asked to claim the LCT back from the ATO in exchange for a commission or fee.
“If you are a promoter of these schemes or arrangements – don’t bother. We now review every LCT refund claim and will stop payments and investigate claims that appear higher risk. Entering into these arrangements may also result in financial penalties or criminal sanctions.
“If you knowingly buy a car that is part of an arrangement designed to avoid LCT, you may also be subject to penalties.
“Most Australians believe in a level playing field and feel it’s unfair for others to gain a competitive advantage by intentionally doing the wrong thing.” Poulakis said.
“If you have entered into an arrangement of this type, contact us. You may wish to make a voluntary disclosure to reduce penalties that may apply,” the ATO added.
Anyone aware of similar arrangements can make an anonymous tip-off online at ato.gov.au/tipoff, through the tip-off form in the ‘contact us’ section of the ATO app, or by calling the ATO Tip-off Hotline on 1800 060 062.
You can find out more about LCT and getting your claims right at www.ato.gov.au/getLCTright